Despite the International Monetary Fund (IMF) warning on Nigeria’s rising debt and taking loans from foreign institutions, the Federal Government has approved another foreign loan of $247.3 million for infrastructure development.
While the IMF says that rising government debt levels could make the global economy more vulnerable to another severe downturn, the federal government in a swift reaction had allayed fears over the nation’s rising debt profile, insisting that the loans taken so far are sustainable.
Nigeria’s domestic and foreign debt had jumped from N12.12 trillion in 2015 to N24.38 trillion in 2018.
The Minister or Finance, Zainab Ahmed, said the loans are $150 million from African Development Bank (ADB) for rural electrification projects; $50 million from Africa Grow Together Fund for more electrification projects; and $20million from French Development Agency for onward lending to Lagos State for strategic urban roads rehabilitation.
According to the minister, “Council approved three memos for ministry of finance. First it approved $150 million loan facility from African development bank and $50 million loan from African Grow Together Fund to finance the Nigeria electrification project. The project is a nation wide initiative to be implemented by the rural electrification agency. The project aligns with the strategy of federal government on electrifying rural community. The project has four components, first is solar hybrid mini-grid for rural economic development, the second is productive appliances equipment for up-grid communities and the third is energising education while the fourth component is institutional capacity building.
“The impact of the project when fully implemented, about 500,000 people will be able to have access to electricity for about 105,000 households. The maximum power that will be generated will be 76.5 megawatts installed generating capacity part of which is 68,000 megawatts of solar.
“Eight universities will benefit from this scheme and about 20,000 small, micro, medium enterprises across different communities in the nation.
“The second approval the north Core dorsal regional transmission project. This is a project that is part of the pipeline for the pipeline for the west Africa power pull priority projects. The intention is for the creation of regional power pull in the region of west Africa. The post project aims to connect Nigeria, Niger, Benin Republic, Togo, Burkina Faso with a high voltage 330 kilowatts transmission line, to facilitate energy trade amongst participants.
“The project is in the total sum of $640 million out of which each of the four countries involved has a component. Nigeria has the smallest component in this pact which is a total loan of $27.3 million IADE facility, it is a concessionary loan. This is a loan that the four countries are taking together, the other three countries have concluded theirs, so this is one of the final stages for Nigeria to conclude its process.
The minister said the $20million loan from France will be obtained for onward lending to Lagos State Government to rehabilitate and open up strategic urban roads, including Marina interchange in the heart of the commercial city, that will be of direct benefit to about 1.8 million road users.
Ahmed disclosed that the project would be handled by the Lagos State government, which the Federal Government has determined to be capable of repaying the debt as and when due.
“The third load approval is $20 million, for the Lagos State Strategic Transport Master Plan, this facility is from the French Development Agency. The objective of the project is to improve the living conditions of the inhabitants of Lagos urban area and to promote urban development sitting by efficient and effective transport system. The project has two major components, first is to rehabilitate urban roads and the creation of minimum of eight equality bus corridors and the creation of two multi-model inter-changes at Marina and Mile 2. The second objective is to provide technical support for implementation and management.
“When completed, the project is expected to impact 1.8 million inhabitants of Lagos State and accumulative 1.5 million users per day for inter-model inter-changes without about 620,000 boarding at Mile 2 and 480,000 boarding at Marina. Another estimated 630,000 boarding at TBS.